RA’s Daily Russia News Blast – Sept. 26, 2007

Russia’s Deputy Prime Minister Sergei Ivanov (L) speaks to workers during the unveiling ceremony of Sukhoi’s Superjet 100 at the aircraft manufacturing plant in the Far Eastern city Komsomolsk-on-Amur September 26, 2007. (Photo: Reuters)

Vladimir Putin has given control of Russia’s Investment Fund to its Regional Development Ministry, which is headed by Putin’s close ally, Dmitry Kozak. The fund, very little of which has been spent in recent years, has been allocated $4bn this year. Politicians and analysts say that Monday’s cabinet reshuffle has “packed the cabinet with [Kremlin] loyalists”. What will become of those who lost their government positions? Analysts say that the appointment of Elvira Nabiullina, a “clone” to replace German Gref as economic development and trade minister, will likely hasten the erosion of the ministry’s influence. Russian Finance Minister Alexei Kudrin said his additional appointment as deputy prime minister was confirmation that the new government would continue current economic policy. Since the reshuffle, Putin dismissed Nikolai Pershutkin, the Interior Ministry’s top official responsible for policing street protests. A draft law on the creation of state-run Rostekhnologil has been created. If passed, it will give Rosoboronexport almost complete freedom of operation, including the ability to hold IPOs for the companies it controls. The bill was introduced by Putin himself – it is thought that previous Prime Minister Mikhail Fradkov had intended to oppose it. How important are “family values” in Russian politics? According to a new survey by the World Bank, Russia is ranked 106th out of 178 countries in terms of how easy it is to conduct business there, while Transparency International gave the country a corruption grade on par with Togo, Gambia, and Indonesia. The take-up of Russian mortgages has risen 150% over the past year, heralding “the rise of the Russian middle class”. Germany’s Europipe and Russia’s OMK have won contracts to supply pipes for the Nord Stream undersea gas link from Russia to Germany, in a deal that could be worth €2bn. After pulling plans for an initial public offering this year, Rusal said it was committed to floating its shares in London within the next three years, and that the postponement was due to turbulent market conditions. Dmitry Medvedev says that, although Russia’s economy is becoming increasingly integrated with the global financial system, effects on the country of the US financial crisis have been minimal. United Aircraft Corp., Russia’s state aviation holding company, is in talks to buy a stake in European Aeronautic, Defence & Space (EADS), and AvtoVAZ, Russia’s biggest carmaker, could sell a stake to either Alexei Mordashov, the CEO of Severstal, or billionaire Alisher Usmanov. Hydro-OGK, Europe’s largest producer of hydroelectricity, will apply for $1.7bn from the state investment fund for a new hydroelectric complex. Yelena Baturina, the wife of Moscow’s mayor, won a lawsuit against the Russian version of Forbes Magazine over two phrases in of one of its issues, which implied that she received special treatment in Moscow when conducting business. The new SuperJet-100, a passenger jet developed by state-run company Sukhoi in conjunction with Western partners, was presented to the public at a ceremony attended by First Vice Premier Sergey Ivanov. A new US Congress bill bans nuclear cooperation with any country that backs Iran’s nuclear program, and would thereby apply to Russia. The President of the International Olympic Committee, Jacques Rogge, is in Russia to discuss the 2014 Sochi games. A new, artificial luxury island off the Sochi resort to be built in the shape of Russia will cost £3bn. The government is developing a revolutionary bird flu vaccine, according to Rosselkhoznadzor, the animal health watchdog. The announcement follows the culling of 250,000 birds in Russia’s Krasnodar territory following an outbreak. A new Russia-US treaty could allow Russian hunters the chance to shoot polar bears.